10:13 FIRST NATURAL<01076> - Announcement (3) Since the existing Warrants may be exercised by the Warrantholders at any time before lapsing on 9 April 2008, the number of Additional Warrants to be issued may be larger than the number of existing Warrants held by the Warrantholders. In accordance with paragraph 4(b) of Practice Note 4 of the Listing Rules, the number of new warrants offered to the holders of the existing warrants must not normally be larger than the number of existing warrants held by them. Under the Subscription Agreement, if the Company fails for any reason to obtain any relevant approvals that are necessary for issuing the Additional Warrants, then the Bondholders may by written notice addressed to the Company redeem all the Bonds. Pursuant to the terms of the Subscription Agreements, if the Company fails to obtain the relevant approval to issue the Additional Warrants, the Bondholders may, within 60 days, by written notice to the Company, require the Company to redeem all the Bonds. Warrants The Additional Warrants, if issued, will rank equally with the existing Warrants issued by the Company and will be issued by the Company in a global warrant (the ``Global Warrant'') which will be deposited with a common depositary of Euroclear and Clearstream. The Global Warrant will be exchangeable for definitive warrants in limited circumstances including but not limited to acts of God, war and riots and events beyond the control of the Company. The Additional Warrants will not be listed on the Stock Exchange or any other stock market. Holders of the Additional Warrants may exercise the subscription rights attached to the Additional Warrants, in whole or in part, at any time until 4.00 p.m. (Hong Kong time) on 9 April 2008 to subscribe for Subscription Shares by either (i) delivering the Bonds it holds, so long as the Bonds are not redeemed, or (ii) paying the paying agent an amount equal to the Subscription Price, at the prevailing exchange rate as determined by the paying agent of the Company. The Subscription Shares Shares that fall to be issued upon exercise of the Additional Warrants will rank equally in all respects with the then existing Shares and will accordingly entitle the holders to participate in all dividends or other distributions declared, paid or made after the subscription date and voting rights unless adjustment has been made as provided below other than any dividend or other distribution previously declared or recommended or resolved to be paid or made. As at the Latest Practicable Date, the Subscription Price, as adjusted pursuant to the terms of the Offering Circular, was HK$0.34 which represents a discount of approximately 42.37% and 40.35% respectively to (a) the closing price of HK$0.59 as quoted on the Stock Exchange on the Latest Practicable Date and (b) the average closing prices of the Shares of HK$0.57 for the preceding three months prior to the Latest Practicable Date. As at the Latest Practicable Date, there were 710 Warrants outstanding. If the Additional Warrants are issued, the Company will have in aggregate 1,250 Warrants and Additional Warrants outstanding. Assuming the exercise in full of the subscription rights attaching to the Additional Warrants and based on the current Subscription Price of HK$0.34 per Share, subject to adjustment, the Company will issue 63,529,412 new Subscription Shares, representing (1) approximately 6.92% of the Company's total existing issued share capital; (2) approximately 6.47% of the Company's issued share capital as enlarged by the issue of Subscription Shares upon the exercise in full of the subscription rights attaching to the Additional Warrants but without taking into account the Shares which may fall to be issued upon the exercise of the subscription rights attaching to the existing Warrants; and (3) approximately 5.96% of the Company's issued share capital as enlarged by the issue of Subscription Shares upon the exercise in full of the subscription rights attaching to the outstanding existing Warrants and the Additional Warrants. The exercise in full of the subscription rights attaching to the Additional Warrants and the existing Warrants would result in Shares, representing in aggregate more than 10% of the enlarged share capital of the Company being issued. To the best knowledge of the Company, the existing Warrants are, and the Additional Warrants will be, if issued, held by three independent investors. Therefore, no one investor will become a substantial Shareholder (as defined in the Listing Rules) as a direct result of the exercise in full of the Additional Warrants and existing Warrants.